Indian shares erase early gains, weighed down Due to IT stocks

Ronit Kawale
Ronit Kawale - Senior Editor
3 Min Read

Indian shares relinquished their early gains on Monday, primarily influenced by a decline in information technology stocks due to diminishing expectations of an early Federal Reserve rate cut.

As of 9:57 a.m. IST, the NSE Nifty 50 index was down 0.06% at 22,028.45, while the S&P BSE Sensex shed 0.11% to 72,342.46.

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Information technology stocks experienced a 1% drop after data revealed that U.S. producer prices rose more than anticipated in January. This development contributed to the belief that any potential Federal Reserve rate cuts are not imminent, impacting IT companies that earn a significant portion of their revenue from the U.S.

Asian markets displayed a muted performance.

On the positive side, energy stocks rose by 0.4%, with Tata Power Company gaining 2% after receiving a letter of intent to acquire a 8.38 billion rupee (nearly $101 million) power project.

Pharma stocks advanced by 0.5%, with Natco Pharma leading the way with a 5.5% increase, making it the top percentage gainer in the pharma index.

Ten out of the 13 major sectors recorded gains.

Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, commented, “Domestic equities have remained resilient in the face of fading hopes of an early U.S. rate cut, thanks to strong macroeconomic fundamentals and persistent domestic inflows.”

Khemka further mentioned that in-line quarterly earnings, sustained stability in energy company earnings, and interest in public sector banks due to valuation comfort have supported sentiment and may potentially drive markets to new highs this week.

In the broader market, small- and mid-caps, which are more domestically focused, gained about 0.4% each, outperforming the benchmark indices.

Among individual stocks, Paytm rose by 5% after the Reserve Bank of India granted its payments bank more time to wind down operations. Additionally, the company partnered with Axis Bank to maintain the functionality of some of its popular products.

Life Insurance Corporation of India saw a 3% increase after receiving refund orders for 217.41 billion rupees from the income tax department.

($1 = 83.0000 Indian rupees)

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